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2019 (8) TMI 559 - AT - Income TaxApproval u/s 10(23C)(vi) rejected - Reason for denial of approval primarily is, the assessee cannot be considered to be an Educational Institution, as it does not provide any formal education as is provided in Schools, Colleges, etc - HELD THAT:- From the facts on record, it emerges that the assessee was incorporated in the year 1928 with the main object of imparting the study of theory of banking and for that purpose to institute a scheme of examination and to give certificates, scholarship and prizes. Further, to promote information on banking and kindred subjects by lectures, discussions, books, correspondences with public bodies and individuals otherwise. It is to be noted that the objects of the assessee have not undergone any material change over the years. Undisputedly, prior to introduction of section 10(23C)(vi), the assessee treating itself as an Educational Institution existing solely for the purpose of education and not for the purpose of earning profit, had claimed exemption u/s 10(22). Decisions of the Tribunal [2001 (2) TMI 1027 - ITAT MUMBAI] holding the assessee to be a educational institution existing solely for the purpose of education and allowing its claim of exemption under section 10(22) will certainly have a crucial bearing while deciding assessee’s claim of exemption under section 10(23C)(vi). Therefore, learned Commissioner (Exemp.) cannot simply brush aside the decisions of the Tribunal by taking shelter behind the adage “principle of res judicata will not apply to tax proceedings”. As in M/S. QUEEN’S EDUCATIONAL SOCIETY VERSUS COMMISSIONER OF INCOME TAX [2015 (3) TMI 619 - SUPREME COURT] held that if the surplus generated by an Education Institution is ploughed back for educational purpose, it has to be held that the institution exists solely for educational purpose and not for the purpose of profit. ADITANAR EDUCATIONAL INSTITUTION VERSUS ADDITIONAL COMMISSIONER OF INCOME-TAX [1997 (2) TMI 3 - SUPREME COURT] held that a trust or other similar body running an Educational Institution solely for educational purpose and not for the purpose of profit can be regarded as other Educational Institution coming within the purview of section 10(22) - Availability of exemption under section 10(22) has to be evaluated each year to find out whether the institution existed solely for education purpose and not for the purpose of profit during the relevant year. The ratio laid down in the aforesaid decisions would also have a crucial bearing while deciding the issue whether the assessee is an Educational Institution existing solely for the purpose of education as per section 10(23C)(vi). On a perusal of the impugned order of learned Commissioner (Exemp.), we find that he has not examined the applicability of the ratio laid down in the aforesaid decisions to the facts of the assessee’s case. Therefore, on overall consideration of the facts and material on record, we are of the view that the entire issue relating to assessee’s application seeking approval under section 10(23C)(vi) needs to be restored back to the file of learned Commissioner (Exemp.) for de novo adjudication - Assessee’s appeal is partly allowed for statistical purposes.
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